Know what the law says about salary deductions

Mukoreh was one of the best graphic designers at an advertising firm in Nairobi, but almost every end of month, he would clash with the salary administrator on deductions in his payslip.

The problem was that Mukoreh had the habit of banging the mouse on the desk and throwing his hands up violently when a creative idea would not come through and broke office items in the process.

Fed up, his supervisor decided to instruct the paymaster to make deductions from Mukoreh’s salary to compensate for the damages. But Mukoreh charged that the deductions were illegal.

One day, the boss found him complaining and took action by pulling out Section 19 of the Employment Act (2007) and read it to him. Mukoreh did not complain again.

The section prescribes the deductions an employer can make from the salary of an employee; including those associated with loss or damage to company property.

The employer is allowed, by sub-section (1)(b) to deduct “a reasonable amount for any damage done to, or loss of, any property lawfully in the possession or custody of the employee occasioned by the wilful default of the employee.”

Indeed the employer must be reasonable when making such deductions and it is important for the worker to know what the law says regarding the same.

For instance, if the loss caused by the employee is valued at Sh2 million and the employee earns about Sh24,000 per month, it is unrealistic to expect to recover the whole of that amount from the salary.

Deduction is also allowed when the employee does not report to work without permission. For the period that the employee is absent, the employer is allowed to withhold an amount from his salary, based on the daily wage.

Dishonest employee

Thirdly, it is legal for an employer to deduct from the employee’s salary, “an amount equal to the amount of any shortage of money arising through the negligence or dishonesty of the employee whose contract of service provides specifically for his being entrusted with the receipt, custody and payment of money.”

Also, if the employer made excess payments to an employee by mistake, the recovery of that money is allowed.

These deductions do not need the permission of the employee to be implemented. The same applies to the statutory deductions such as income tax, NSSF, NHIF and pension.

The employer has the legal responsibility to collect the statutory deductions on behalf of authorities and remit the collections to the necessary accounts.

An employer who fails to comply with the provisions relating to the statutory deductions “commits an offence and shall on conviction be liable to a fine not exceeding one hundred thousand shillings, or to imprisonment for a term not exceeding two years or to both,” according to the Employment Act, under sub-section 5 of Section19.